Boulder unveils utility transition plan

BOULDER – The city of Boulder released Thursday a plan that includes buying power from Xcel Energy Inc. (NYSE: XEL) during the period when the city transitions to creating its own electric utility.

The city hired PowerServices Inc., a consulting firm based in Raleigh, N.C., to prepare the report with city of Boulder staff members. The report outlines ways Boulder can provide a safe and reliable system, minimize customer impacts, manage costs and expand its renewable energy portfolio.

The plan envisions that Boulder would begin operating its own utility and billing customers during the third quarter of 2016. The city, however, would have to buy “some or all of its energy from Xcel Energy for an interim period of time in order to minimize the city’s financial obligations, especially if Xcel Energy is successful in arguing that it is entitled to stranded costs.”

The plan also consists of two scenarios, the first involving agreements for Xcel to give the city access to its facilities before the city starts operating them and sharing information and data about equipment during a transition period. The second scenario assumes the city will not reach these kinds of agreements with Xcel.

“Our customers will expect us to make this transition smoothly, and we are committed to doing all we can to ensure the highest level of service delivery from the outset and into the future,” said Heather Bailey, Boulder’s executive director of Energy Strategy and Electric Utility Development, in a statement.

The plan’s release follows a petition filed by the city of Boulder in Boulder County District Court on July 17 to condemn portions of the electric system owned by Xcel through eminent domain. Xcel, which does not want to sell its assets, has asked a judge to dismiss the condemnation case.

Boulder has sought to create its own utility to generate more electricity from renewable energy while offering competitive electricity rates and reliability. Xcel contends it can help Boulder reach its clean-energy goals faster and more economically than the city can do on its own.

Boulder also said Thursday that it expects resolving the litigation will take “a minimum of 18 to 24 months.” The city plans to phase in hiring of essential employees and other items during the period.